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HR outsourcing becomes mainstream

Posted on April 9th, 2014 Read time: 1 minutes

Many companies have begun to get rid of their HR Departments, according to The Wall Street Journal. These companies are now sending their work to HR outsourcing services that can do the job faster, more cheaply and better than a traditional department.

According to the article, traditional HR departments "stifle innovation" by filling up a business's time with paperwork and taking "people" out of the job equation. HR back office companies, in comparison, are much more streamlined and experienced.

Some companies find not having an in-house HR department can make certain things difficult, such as dispute mediation and resolving disputes between workers regarding pay. However, those same problems could theoretically be solved by using in-house staff who are better embedded in the workplace, such as bosses and managers who are directly involved with the employees who are disputing things.

The problem of how to handle the basic bare bones business of HR, such as the paperwork that must be filled out in compliance with government regulations, can be outsourced effectively. In fact, one company, Statoil, has effectively outsourced 79 of its jobs to a pair of human resources firms. The company believes it can outsource 300 of its jobs once it finds the right company for each sector it wants to outsource. Thirty of the employees who were outsourced have been offered other jobs within the company.

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